Imagine hosting a dinner with about 40 people and not having any topics to discuss.
That was pretty much the case last week when DFJ held its annual media gathering at Steve Jurvetson’s house in Half Moon Bay, California.
Off limits for discussion was the firm’s filing that day to raise a new $500 million growth fund.
Nor could we ask about Tesla’s interest in buying Solar City. DFJ is an investor in both, with investors on the two boards.
And don’t even broach the Twilio IPO, which was scheduled to go out the next morning. In fact, DFJ Partner Josh Stein missed the dinner, having flown to New York to take part in Twilio’s celebratory launch on Wall Street.
Actually, even if a DFJ partner had said something about the IPO or any of the other topics, I couldn’t repeat it. This was an off-the-record event.
What I can say, however, is that Jurvetson, as he always does, launched a couple of rockets from his beachfront property that he made himself, using a 3D printer and golf balls that strayed onto his property from the Ritz-Carlton Hotel next door.
“This is my way of returning them,” he said, shortly before he fired the rockets. Both veered off course and sputtered over our heads, the result of an imbalance he caused when he strapped some blinking lights to the missiles.
Hey, even one of the smartest guys in Silicon Valley can miscalculate. (No one was hurt and nothing caught fire.)
What didn’t go awry was the Twilio IPO.
The San Francisco software and cloud-based-communications-platform provider went out a day ahead of the Brexit vote tally at $15 a share, above its $12 to $14 range. Not a moonshot, but far from sputtering, too.
Shares of Twilio closed the first day at $28.79, more than 90 percent above the debut price, valuing the company in excess of $2 billion. Twilio had reached unicorn status a year prior, shortly after one of its funding rounds yielded it a $1.1 billion value.
The exit was particularly good news for Bessemer Venture Partners, which owned 28.5 percent of the shares prior to the offering, according to its prospectus.
The Form S1 showed that Union Square Ventures held 13.6 percent, followed by Fidelity with 6.1 percent and Redpoint Ventures with 4.6 percent before the IPO. Other investors include 500 Startups, Founders Fund and Salesforce Ventures.
The question remains whether this billion-dollar exit will truly raise hopes that investors’ appetite for U.S. tech IPOs is finally returning.
This was only the third tech company to go IPO this year and only the second that was VC-backed.
Maynard, Massachusetts-based Acacia Communications Inc became the first venture-backed tech IPO this year, when it went out in May. Dell Inc‘s Atlanta-based SecureWorks was the stock market’s first overall tech IPO this year when it debuted in April.
It would be nice to see more tech companies, especially unicorns like Twilio and Atlassian late last year, test the waters and ring the bell to signify they’re publicly traded.
But I’m not expecting a rush to IPOs. One tech IPO, no matter how significant, doesn’t green-light the way for all companies. Too many other factors are in play, including world events like Brexit, the U.S. presidential election and so forth.
In 2012, when Facebook had its outsized public offering, the amount of VC-backed IPOs that year actually dropped compared with the year before.
Year-to-date in 2016, thanks to a bevy of biotech IPOs, 17 venture-backed companies have debuted on the Nasdaq or NYSE, and that includes Twilio. This will likely end up a bad year for VC-backed IPOs. Not as bad as the 12 in 2009.
Reuters reported that AppDynamics is pushing ahead with its IPO plans. I’m sure we’ll see more tech IPOs this year, but I’m not seeing a flood of entrants.
One thing I can say for certain is that the next time I see Jurvetson fire off one of his homemade rockets, its trajectory will stay true as it arcs to its apex. A launch failure for the Rocket Man is unusual.
I’m much less certain about the appetite for tech IPOs in 2016.
Photo of Jeff Lawson, founder, chairman and chief executive of Twilio, rings a ceremonial bell to signify trading of his company’s stock during the IPO at the NYSE on June 23, 2016. Reuters/Brendan McDermid